Are you under debt review and need a loan urgently in South Africa or anywhere in the world? Well, worry less because I’ll be showing some quick tips to get this done.
But can you get a loan while under debt review in South africa? The short answer here is that you can not get a loan legally while you are undergoing a debt review process.
South Africans are using debt counselling to resolve their financial worries by undergoing loan debt review and yet I understand that many people would still need a loan urgently to kick start their business ideas or a startup program.
According to TransUnion Q1 2022 statistics, they show’s that 88% of consumers considered access to credit and lending products important to achieve their financial goals and also when it comes to paying current bills and loans, 56% said they’ll be able to pay them in full, well, that’s a 10% improvement from Q1 2021.
Furthermore, people who considered applying for new or refinancing existing credit, 42% stated they ultimately decided against it due to fear of being declined for low income and employment status (31%), and the cost of new credit or refinancing being too high.
TransUnion’s quarterly study looks at how people’s personal finances have evolved over time and what they expect to change in the future. Based on the dynamics of income, debt, and identity theft.
Even when everyone wants to control how they repay bills or loans by undergoing debt review, the fact remains that many consumers are still under severe financial pressure, and would still need to acquire a loan to keep them moving.
So here in this Article I have decided to gather information about getting loans for people under debt review in South Africa. But before I tell you everything in detail, firstly what is Debt Review?
What is Debt Review and how does it works
If you need to get loans for people under debt review, then you need to take action. Here’s how debt review works, and how it could help.
What does debt review mean? It is a legal method of getti6 free from your past loan debt. You can file for debt review if you are over-indebted and struggling to satisfy or pay your debt obligations.
If you are under debt review, it means you have appointed a debt counsellor who has deemed you v debt review process your debt would spiral out of control and you would be unable to make the committed repayments which could hurt you in future by restraining you from getting loans.
Where to get a loan if under debt review?
There are however a variety of unregistered online loan sharks and reckless lending companies within the market. It’s likely that these online loans for debt review clients are looking to harvest money out of you by taking advantage of your vulnerability and can have incredibly high-interest rates.
Do you really want to know where you can get a R5000 loan even if you are under debt review? Well, I know it’s too hard to live when there’s no money, so in the next section we’ll be discussing about places to get loans.
What Should you do If I can’t get loan during Debt Review
The answer to this is for you to be patient. Debt reviews help you to learn your lesson and save you from property loss. Once you are released from debt review, you will be able to take on more credit and hopefully would have learnt not to repeat the same mistakes.
The National Credit Act introduced debt review as a debt relief measure for over-indebted consumers. The NCA sets This process to take time in order to rehabilitate your spending habits, the best practice is to see your debt review to completion, and stick to the process.
List of Loans For People Under Debt Review in South Africa
When you’re under debt review, here are some types of loan that you can apply for and still gain access. Remember that you are going against the NRC law and you might also have to pay a higher interest rate to this loan shark and violators.
Here are some loans you can take when undergoing debt review in South Africa.
- Payday Loans
- Personal Loans
- Consolidation Loans
- Title Loans
- Pawn Shop Loans
I’ll be giving some clear definitions of these loans and how you can get them.
1. Payday loans for debt review clients
Payday loans are one of the quickest ways to get loans for people under debt review. They are short-term loans or salary loans for small amounts of money which are available from high street shops and payday online loan sites. This type of loan is usually characterised by high interest rates.
Payday loans can be easy to get but interest rates are very high. The basic loan process involves a lender providing a short-term unsecured loan to be repaid at the borrower’s next payday i.e, when you acquire this kind of loan, you’ll have to pay back at the end of the month.
You should note that not all cash lenders would be willing to give you this loan if they noticed you are under debt review. But others who are interested in making a profit out of you will definitely help you secure the loan and you’ll start paying by the end of the month with a high interest rate.
Disadvantages of getting a Payday loan when under debt review
- Payday Loans Are Very Expensive with a high interest rate of 28 to 36%.
- You’ll be going against the law of NCA
- You might still be unable to repay the loan.
2. Personal Loans under debt review
Personal Loan, which is also known as a consumer loan is a multi-purpose loan, which you can use to meet any of your immediate needs. These loans are paid back in monthly instalments or in a few years, depending on how you want to repay.
Some online loans for debt review clients provide this kind of service. And you can simply walk up to such a company and get your loan.
Remember that, acquiring other loans while you’re still under debt review is hazardous and unlawful. The NCA specifies that people under debt review are prohibited from applying for loans while they are still over-indebted.
3. Consolidation Loans
Debt consolidation, the process of combining two or more loans into one big loan. This means that your various debts, whether they are credit card bills or loan payments, are rolled into one monthly payment. This may be a way to simplify or lower payments and interest but this does not mean your debt has been erased.
Getting a consolidation loan could be the best method for getting a loan while under debt review. But the National Credit Act (NCA) goes against this, applying for a debt consolidation loan for people under debt review is deemed to be reckless lending.
Is Consolidation loan the same as Debt Review?
No they are not the same, Debt Review will consolidate all your debt without you having to take out a new loan or paying for a higher interest rate but Debt consolidation on the other hand will require you to acquire a loan that will settle all your combined debt and you’ll then start paying for your consolidation loan.
You can use consolidation loan to get out of debt review as fast as possible but is it wise to think through before engaginging in such act.
Disadvantages of getting debt consolidation loan
- It is not accessible to everyone
- If your credit score is below 700, you might not be opportune to get the best interest rate as as you might be paying interest that are classically higher
- If you have poor credit, you will not get approved for the loan.
4. Title Loans for clients under Debt Review
If you take out a car title loan in South Africa, you’re essentially pawning off your vehicle. Unscrupulous loan sharks will take advantage of your situation.
If you don’t repay the loan on time, the lender will repossess the car and or even if you wish to extend your service of repayments, they’ll add interest and fees which is expected to be higher than before.
5. Pawn Shop Loans
Pawn Shop loans are a fast way to get money in South Africa. The pawnbroker isn’t worried about your credit report or the fact that you’re under debt review. If you fail to pay it back, you lose your asset and make a huge profit at your expense.
To get credit from a pawnbroker, you have to bring them a valuable asset, such as a TV or a laptop and they pay about a third or half the amount of the asset.